Huge provisioning for bad loans continued to pummel public sector banks. IDBI Bank on Friday posted a standalone net loss of Rs 2,184 crore — the largest by a PSU bank so far — for the December quarter of the current fiscal as against a net profit of Rs 103 crore in the October-December period of last fiscal on the back of a sharp rise in provisioning and bad loans.

With this, eight PSU banks have made a combined loss of Rs 7,907 crore for the December quarter. The Reserve Bank of India had asked PSU banks to treat some troubled accounts as official bad loans and make adequate provisions. Among the worst performers, IOB made a loss of Rs 1,425 crore and Bank of India Rs 1,505 crore.

 Reserve Bank Governor Raghuram Rajan on Thursday said banks “may require deep surgery” in order to put the stressed projects back on track and clean up the balance sheets of banks. Rajan’s observations came in the wake of reports about the surging NPAs, loan write-offs and poor financial results by public sector banks. It had reported that PSU banks had written off Rs 1.14 lakh crore in the last three years. IDBI Bank’s gross NPAs increased to 8.94 per cent (Rs 19,615 crore) from 5.94 per cent (Rs 12,140 crore) in the year-ago quarter. Similarly, the net NPA was up at 4.6 per cent in Q3 of the fiscal from 3.05 per cent in the year-ago period. Its income fell to Rs 7,361.86 crore in the quarter under review from Rs 7,935.99 crore a year ago. Net provisions for the quarter rose to Rs 3,302 crore from Rs 1,011 crore in the same period of last year.

The government shareholding, post capital infusion, increased to 80.16 per cent in the December quarter from 76.5 per cent in the corresponding period of the last fiscal. Minister of State for Finance Jayant Sinha had recently said the government is ready to discuss strategic stake sale in IDBI Bank with “any interested party”.

Corporation Bank loss at Rs 383 cr

Corporation Bank has come out with a loss of Rs 383.37 crore for the third quarter ended December 2015 due to significant jump in bad loans as against a net profit of Rs 147.20 crore in the same quarter last year. Gross NPAs as a percentage to total advances rose significantly to 7.32 per cent from 4.88 per cent in the same quarter year ago. Net NPAs went up to 4.84 per cent from 3.27 per cent at the end of December 2014.

Canara profit slips 87%

State-run Canara Bank has reported a whopping 87 per cent drop in net profit at Rs 84.9 crore for the third quarter of 2015-16 on account of rise in bad loans as compared to a net profit of Rs 655.9 crore for the October-December quarter of 2014-15 fiscal.

Gross NPAs as a percentage of total advances rose to 5.84 per cent from 3.35 per cent in the same quarter a year ago. Its net NPAs went up to 3.90 per cent from 2.42 per cent at the end of December 2014. Gross NPAs in absolute terms rose significantly to Rs 19,813.44 crore as compared to Rs 10,573.57 crore at the end of December 2014. However, total provisions, excluding for income tax, made during the third quarter were Rs 1,428.85 crore as against Rs 841.33 crore in the year-ago period.

Andhra Bank profit slides 83%

Andhra Bank, another PSU bank, has reported a 82.91 per cent plunge in net profit at Rs 34.46 crore for the third quarter ended December 31, on higher bad loans. The bank’s net profit was Rs 201.71 crore in the corresponding October-December quarter of 2014-15. Total income increased to Rs 4,801.4 crore for the quarter.

Provisions for bad loans were raised to Rs 905.56 crore for the quarter ended December, up from Rs 541.52 crore kept aside in the same quarter of the previous fiscal. Gross NPAs stood at 7 per cent during the quarter as against 5.99 per cent a year ago. Net NPAs were 3.89 per cent of net advances, up from 3.7 per cent a year ago.